Persian Gulf Shipments of Jet Fuel to EU to Remain Duty-Free

By Jonathan Stearns -
Jul 31, 2013

The European Union said its imports
of jet fuel from Persian Gulf countries including Saudi Arabia
will remain duty-free after this year because air-services
agreements exempt the shipments from levies.

The European Commission’s assertion seeks to end weeks of
confusion over whether the EU would apply its 4.7 percent import
duty for aviation fuel to countries that are due to lose EU
tariff benefits in 2014. Nations including Saudi Arabia, Oman,
the United Arab Emirates, Kuwait and Bahrain are scheduled to be
stripped of tariff privileges granted under the EU’s Generalized
System of Preferences, or GSP, because of gains in national
wealth.

“Some 1,500 binding air-services agreements exist between
EU member states and third countries,” John Clancy, a trade
spokesman at the commission, the 28-nation EU’s executive arm in
Brussels, said today in an e-mailed reply to questions. “These
agreements include provisions exempting jet fuel from duties and
taxes, disregarding its origin. Hence, jet-fuel imports from the
Gulf countries are exempt from paying duties, irrespective of
the changes in the EU’s GSP.”

The Association of European Airlines had argued that jet
fuel imported from Gulf countries should remain exempt from the
EU’s 4.7 percent tariff after 2013 because aviation accords
between individual EU countries and those suppliers guarantee no
levies on the fuel.

AEA members, which include Air France-KLM (AF) Group, Deutsche
Lufthansa AG (LHA) and British Airways, spend 35 billion euros ($46.5
billion) a year on jet fuel, a sum equal to around 35 percent of
their annual costs, Athar Husain Khan, acting secretary general
of the Brussels-based association, said by phone on July 17.